GROCERY

No Aisle Left Behind

The coronavirus outbreak sent Mercury into retrograde three months early at most grocery stores...except for Texas’s H-E-B.

On Twitter, customers enthuse that H-E-B “has the ’rona in check.” H-E-B shelves are well-stocked. Stores don’t have a Hunger Games atmosphere. H-E-B even has enough food in its warehouses to donate 500,000 meals to Texas food banks. 

How did H-E-B sidestep the initial chaos other chains faced? The short answer, per Texas Monthly: constant vigilance.

H-E-B’s pandemic plans have been braising since 2005, when the H5N1 virus became a threat in China. Its emergency response team began refining those plans for 2020 as soon as Wuhan’s coronavirus outbreak escalated.

• H-E-B reached out to Chinese retailers starting in January, then to Italian retailers and suppliers in recent weeks.
• They weren’t talking sugar cookie recipes. H-E-B was learning which products consumers would want stocked at what points during the pandemic’s curve and how it could support staff. 

With intel from international retailers, H-E-B could be proactive instead of reactive. Like other grocers, H-E-B has mandated social distancing in stores and reduced hours to restock shelves—but those moves were levers it was prepared to pull. 

As for frontline workers...extended sick leave, pay increases, and an employee hotline were baked into emergency plans. 

• H-E-B also has a chief medical officer and medical board to monitor employee health.
• Workers at its San Antonio HQ have access to a private store for essentials, since it’s difficult for them to shop in-store during the updated hours. 

But the company admits it couldn’t predict every COVID-19 shopping trend: “We did not see runs on toilet paper as one of the first things to go out of stock,” H-E-B president Craig Boyan told Texas Monthly. 

My takeaway: It may feel too early to think about the next crisis. But when it comes, retailers should follow H-E-B’s lead by preparing far ahead and for the worst.

LUXURY

Broke With Expensive Taste

That about sums up the luxury fashion industry’s status in the coronavirus era. Boston Consulting Group slashed its 2020 sales projections for the sector Friday. 

• Global luxury sales could decline $85 billion–$120 billion this year—or about 29% of the total luxury market. 
• Overall, fashion and luxury could lose between $450 billion–$600 billion this year. That would be a larger decline than the sector experienced during the 2008 recession.

Why luxury’s hurting: Hermès regulars were insulated from financial difficulties during the 2008 crisis. But COVID-19 doesn’t care how many Birkins you have—and it’s denting consumer confidence at every income bracket, BCG analyst Javier Seara told Vogue Business. 

• Low on cash and customers but high on debt, many luxury brands will likely default in the next 12 weeks, Seara cautioned. 

Looking ahead...flashy events are going away with sales. Men's and haute couture fashion weeks in London and Paris, plus Milan's men's fashion week, have been postponed. They're usually held at the end of June.

But losing runways won't be much of a blow. In the understatement of the century, Bain & Company calls fashion shows an unnecessary expenditure in a crisis.

SPONSORED BY ORACLE NETSUITE

Your Inventory and Your Financials, Together, At Last

If your retail inventory and your financial data aren’t together in the same system, you’re going to be making business decisions based on guesswork instead of facts.

Plus, your inventory and your financials deserve each other, and their relationship together is beautiful, healthy, and something to behold. Do not keep them apart.

Oracle NetSuite wrote up a white paper explaining the many benefits retail brands can reap if they unify their inventory and financials. Among those benefits:

• You’ll free up finance and operations’ time, allowing them to focus on other lucrative things.
• You’ll improve the accuracy of your financials and reduce month-end processing costs and time.
• Manage uncertainty—there’s enough of it to go around right now, and NetSuite reduces it by giving you visibility and control.

Unite your inventory and your financial data. Take Oracle NetSuite’s word for it.

TRENDS

Home on the Restricted Movement Range

In quarantine week three, the only difference between working hours and nonworking hours is what we’re buying for them. 

During the work day…business up top, nap down below is the video meeting dress code. So tops—button-downs, polos, and the like—are far outselling bottoms at Walmart, EVP Dan Bartlett told Yahoo Finance. 

But the blouse surge may end soon, WSL Strategic Retail CEO Wendy Liebmann told the WaPo. The longer we live in quarantine, the more comfortable we’ll become wearing a college hoodie to a virtual all-hands. 

After hours...it’s a nuclear farms race, the NYT reports. Shoppers are purchasing:

Baby chicks. Consumers are flocking to buy newly hatched chickens because they’re food sources (eggs) that double as comfort animals. It’s a traditional coping mechanism: Baby chick sales typically climb during stock market declines and presidential election years, the NYT notes. 

Seeds. Seed distributor Burpee’s CEO Jamie Mattikow told the NYT vegetable seed sales shot up the most in mid-March—suggesting shoppers are attempting to grow their own food. Key word: attempting.

WHAT ELSE IS BREWING

• World Retail Innovation Week, an online retail conference, starts today. 
• Amazon gave fulfillment and delivery workers letters confirming their work is “essential,” in case law enforcement checks.
• Chanel said yesterday it’s making protective masks for French authorities. 
• Reformation is doing the same thing, but for California authorities. 
• StockX CEO Scott Cutler said the pandemic has benefited its sneaker resale business.  
• Rent the Runway laid off an unconfirmed number of store employees.
• Everlane laid off or furloughed more than 200 workers.

SPONSORED BY ATTENTIVE

What e-commerce businesses need to know now. Attentive, a personalized mobile messaging platform, has been closely monitoring the effects of COVID-19 on the e-commerce industry. They've created a dedicated microsite featuring analytic insights and trends—organized by sub-vertical—to help businesses adapt to a rapidly changing world. You can also join their webinar on April 2nd at 1pm ET to learn how brands are adapting to shifting consumer behavior. Get all the info here.

TALKING SHOP

It’s been seven months since Thakoon Panichgul relaunched his namesake designer label as a D2C brand. As Panichgul looks at the year ahead, he’s optimistic his brand can become a lifestyle staple—even amid a global pandemic. He explains why in today’s installment of Talking Shop; you can read it here.

SWAPPING SKUS

A picture of the outside world is worth 1,000 rolls of toilet paper today. Here, I present two photo essays on the state of grocery shopping in the U.S.’ coronavirus epicenter: New York City. 

• Peek inside carts from a Brooklyn grocery co-op to an East Harlem Costco (The New Yorker).
• Then meet the cashiers who double as pandemic psychologists for their worried customers (Vogue).